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Fallout from Grokster case closes down eDonkey

Under pressure from the RIAA, the company that distributes the P2P software …

The P2P pogrom has already taken down WinMX, but in an appearance before the Senate this week, the distributors of the popular file-sharing program eDonkey also announced that pressure from the RIAA and the Supreme Court ruling in MGM v. Grokster had caused it to shut down its operations. Sam Yagan, whose company MetaMachine, Inc. also develops Overnet, claimed that the persecution of file sharers would cause P2P companies to move their operations overseas.

The tenor of our conversations with content owners took a turn for the worse when MetaMachine received one of the previously described cease-and-desist letters from the Recording Industry Association of America (RIAA). This threat of imminent litigation from the major music labels, coming in light of the Supreme Court?s ambiguous ruling led us to conclude that, regardless of the virtue and lawfulness of our intentions and practices and our confidence that we never intentionally induced infringing activity, we did not have the resources to endure the protracted litigation that the RIAA letter presaged.

Because we cannot afford to fight a lawsuit ? even one we think we would win ? we have instead prepared to convert eDonkey?s user base to an online content retailer operating in a ?closed? P2P environment. I expect such a transaction to take place as soon as we can reach a settlement with the RIAA. We hope that the RIAA and other rights holders will be happy with our decision to comply with their request and will appreciate our cooperation to convert eDonkey users to a sanctioned P2P environment.

Just last month, a study by Internet analysis firm CacheLogic found that BitTorrent's popularity was waning in favor of eDonkey, and industry insiders speculated that the flood of lawsuits against BitTorrent users prompted the move to decentralized services. Despite eDonkey's reported rise in popularity, it was BitTorrent who received nearly US$9 million in venture capital while MetaMachine's Yagan was left to make a final, impassioned plea for cooperation between other P2P companies and the copyright holders.

Yagan's decision to shutter his company's services is an understandable effort to avoid a costly legal battle, but his legacy will continue to live on in the development of eMule, the open source project built around the eDonkey protocol. It remains to be seen whether other P2P networks will follow in Yagan's steps or, as the Supreme Court claimed, the industry would be forced to evaluate whether their business model complied with the ruling, but eDonkey is now only a cautionary tale for P2P developers looking to work in the United States.